I like this article. This is what I'm planning to do with my retirement accounts, and I've often wondered why I don't see more people reporting that they pursue the same method. It seems like a no brainer to me: do not spend your principal, which can produce income, because you may find that you have more years of life than you do dollars of principal.
I also prefer this approach because it requires that one roll with the punches, so to speak, rather than trying to force an unlikely/impossible result from a retirement account. What I mean is that unlike a defined benefit model (an arrangement in which your distribution is X amount and the account manager attempts to sustain that payout through market swings in either direction), a dividend/interest-only distribution strategy can see the distribution fluctuate up and down, but do so with a greater chance of living to fight another day since it is not principal that is being drawn from during market downturns.
This approach also provides a benefit that cashing out a percentage of principal does not: while market fluctuations are common, dividend cuts are less so. Instead, it is dividend increases that are relatively more common.
It still requires that one spend below their means to make it work (like everyone should anyway). If one's investments are spread out enough such that no one of them constitutes a major percentage of the total income of the portfolio, any dividend or interest rate cuts should be easily weathered and later adjusted for (and if you reinvest any unspent money periodically, a dividend cut may only mean a slight reduction in the margin between your portfolio's total income and the last dollar of your budget - discipline pays).
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